LESSON 7-3 Accounts Receivable Turnover Ratio

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Presentation transcript:

LESSON 7-3 Accounts Receivable Turnover Ratio 11/7/2018 LESSON 7-3 Accounts Receivable Turnover Ratio RED

CALCULATING THE ACCOUNTS RECEIVABLE TURNOVER RATIO page 211 Compute the beginning and ending book value. 1 Total Accounts Receivable Allowance for Uncollectible Accounts Book Value of Accounts – = Beginning $50,329.14 $1,416.83 $48,912.31 – = Ending $45,462.79 $1,363.88 $44,098.91 – = LESSON 7-3

CALCULATING THE ACCOUNTS RECEIVABLE TURNOVER RATIO page 211 Compute the average book value. 2 Beginning Book Value of Accounts Receivable Ending Book Average Book + =  2 ($48,912.31 $44,098.91) $46,505.61 + =  2 LESSON 7-3

CALCULATING THE ACCOUNTS RECEIVABLE TURNOVER RATIO page 211 Compute the accounts receivable turnover. 3 Net Sales on Account Average Book Value of Accounts Receivable Accounts Receivable Turnover Ratio  = $330,312.85 $46,505.61 7.1 times  = LESSON 7-3

CALCULATING THE ACCOUNTS RECEIVABLE TURNOVER RATIO page 211 Compute the average number of days for payment. 4 Days in Year Accounts Receivable Turnover Ratio Average Number of Days for Payment  = 365 7.1 51  = LESSON 7-3

ANALYZING ACCOUNTS RECEIVABLE TURNOVER RATIOS page 212 LESSON 7-3

TERMS REVIEW accounts receivable turnover ratio LESSON 7-3 11/7/2018 TERMS REVIEW page 213 accounts receivable turnover ratio book value of accounts receivable LESSON 7-3 RED